Growth Tax Plan Needs Open Debate

Wed., Aug. 10, 1994

By John Webster johnwe@spokesman.com (509) 459-5421

Development on the outskirts of Spokane causes the rest of the community some expensive headaches. Crowded schools. Crowded streets. Strains on fire and police protection.

To relieve those strains, local government needs money.

The issue is not just how to raise the money, it’s how to raise the money fairly. Developers of outlying property, and those who buy homes there, ought to fund the lion’s share of the infrastructure improvements they are making necessary.

Next Monday, the Spokane City Council will consider a tax increase that would place most of the burden where it does not belong - on the owners of existing homes.

The proposal is a 0.25 percent boost in the real estate excise tax. The seller in a transaction pays the tax, which is now at 1.53 percent, or $1,530 on the sale of a $100,000 home. The increase would generate about $1 million a year.

Most real estate sales involve existing homes, whose owners already have been injured as traffic from the new, outlying suburbs degrades their neighborhoods.

The city would compound the injustice if money extracted from existing neighborhoods were spent on improvements close to the new fringe neighborhoods rather than on overloaded streets that are close to the core and the people who’d pay this tax.

Another proposal submitted to the council would place the tax burden more fairly. The same task force that recommended the excise tax increase recommends interim, voluntary impact fees on new construction - to be followed by permanent impact fees later.

Lawyers in City Hall are working on details of how an impact fee proposal might work.

But the City Council did not place impact fees on its agenda for Monday. That raised a question: Are council members trying once again to do a favor for the development industry, at the expense of existing neighborhoods?

As if to intensify the suspicion, the council scheduled the excisetax increase for hearing in the middle of August when many people are out of town. This invites the accusation it’s trying to slip something through.

The council does deserve some credit for bringing this issue forward, and it still could prove the suspicions unwarranted. In order to make its taxing method fairer to the majority in this increasingly growth-sensitive city, the council must add some hefty impact fees to its package. And, it should extend the debate into September so the whole community can participate.

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